Judge orders Josh Powell life insurance money be split 50-50

TACOMA, Wash. — A Washington judge says it may be "legal fiction," but for the purposes of handling the life insurance policies of Josh and Susan Powell, Susan Powell is still alive.

Last week, a U.S. District judge issued an order about who should get the money from three separate life insurance policies tied to Josh and Susan Powell. The ruling gave each side — the father of Susan Cox Powell and three family members of Josh Powell — more than $750,000.

Josh Powell's New York Life policy, worth over $1 million plus interest, will be split 50-50 among Chuck Cox, Susan Powell's father, and three members of Josh Powell's family that were listed as beneficiaries: his brothers Michael and John and his sister Alina.

Because Cox is his daughter's conservator, he will receive about $529,000 plus 50 percent of the interest accrued, according to the judge's order.

Last week, a U.S. District judge in Washington issued an order about who should get the money from three separate life insurance policies tied to Josh and Susan Powell. The ruling gave each side — the father of Susan Cox Powell and three family members of Josh Powell — more than $750,000. (Pat Reavy, Deseret News)

The estate of Michael Powell, who committed suicide in 2012, will receive about $492,000 plus 46.5 percent interest. Alina Powell will receive about $21,000 plus 2 percent interest and John Powell about $16,000 and 1.5 percent interested, according to the ruling.

The riders from New York Life covering Josh and Susan Powell's two sons, Charlie and Braden, will also be split 50-50, giving Cox and Michael Powell's estate about $264,000 each plus interest.

In his order, Judge Ronald Leighton ruled that Washington's so-called "slayer statute," which prevents a killer from benefiting from life insurance policies, does not extend to other members of Powell's family.

Susan Powell went missing from her home in West Valley in 2009 and is presumed dead. Police suspect Josh Powell killed his wife, but he was never arrested or charged with her death or disappearance. Josh Powell later killed himself after murdering their two young sons.

Tom West, one of Alina and John Powell's attorneys in Washington, called the judge's ruling a "good and fair order."

"We always thought that the Coxes and the Powells should, more or less, split the policies," West said. "We have no intention of appealing that part of the order."

The second insurance policy in question was Josh Powell's Beneficial Life Policy. The court noted that while Powell's New York policy was changed numerous times after his wife went missing, Josh Powell's Beneficial policy was not touched. Susan Powell was the primary benefactor and, because Josh Powell legally preceded her in death, Susan Powell's conservator will get all of $500,000 policy and interest, the judge ruled.

The federal judge in Washington noted that because a missing person is not considered legally dead in Utah until after five years, Susan Powell will not legally be considered deceased until Dec. 6, 2014.

"Although presuming that Susan is alive may ultimately be legal fiction, it is a legal fiction that was purposely and intentionally created for situations just like this," the judge ruled. "Accordingly, Susan is presumed to be alive and the insurance proceeds will be distributed accordingly."

The third life insurance policy in question is Susan Powell's $1 million policy from New York Life that lists Josh Powell as the primary benefactor and her and Josh Powell's trust as the second beneficiary. With interest, the trust is now worth more than $2 million.

That trust, however, is still the subject of a court challenge in Utah. Currently, Cox is the sole benefactor of the trust and would receive 100 percent of the money. But Josh Powell's mother, Teri Powell, and his sister, Alina Powell, contend they were illegally removed from the trust and are challenging the issue in court. West said they believe that money should also be split 50-50.

"This was a trust that was established by Josh and Susan years ago. And the idea was that essentially, if the parents were dead and the boys were dead, then the two families would split whatever the proceeds were. What he has done effectively has removed the Powell family from receiving any of those proceeds by his actions. And we're saying that action is inappropriate and violates a number of laws and fiduciary. "Mr. Cox at this has taken an unfair advantage, in our estimation, of his position as conservator and changed the trust so the Powells get nothing," West said.

"The Coxes, or their attorney, have taken certain liberties in lumping the Powell family into some of the awful things that have happened to the family, and there are some innocent people on both sides. These proceeds are generated by the deaths, according to Teri, of her son, her daughter-in-law that she loved very much and her two grandchildren. To say that she somehow is not worthy is a bit of a stretch and we think it's just greed on the part of the Coxes," he said.

"It's not that they didn't lose someone they loved. Clearly they did. But they weren't the only ones."

West believes there is a chance that whatever decision is made in Utah on the Susan Powell trust will be appealed no matter which way the judge rules.

Steven Powell, Josh Powell's father who was recently released from prison after serving 30 months for taking voyeuristic pictures of two neighbor girls, will not be receiving any of the life insurance money in question, he said.